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Grand Prix promoters organize to gain bigger say in series

The Formula One Promoters Association hopes to have a say in Formula One rule changes and other items of interest to track promoters. Photo by LAT PHOTOGRAPHIC

There is a new player in the Formula One political game. Event promoters that stage Grand Prix races have come together to form the Formula One Promoters Association.

Registered in Geneva, Switzerland, the group will represent its interests in negotiations with the FIA, world motorsports' governing body, and Formula One. The new company's articles of association state that its objectives are to “promote better understanding of Formula One racing by the media and the public and to encourage ticket sales at individual events.”

During 2011, the events promoters paid Formula One $510 million for the rights to host their races. However, the promoters are still excluded from the Concorde Agreement, the contract between Formula One, the FIA and the teams that defines Grand Prix racing's commercial arrangements. The present Concorde Agreement will expire on Dec. 31, and negotiations for an eight-year extension—again without involving the promoters directly—are almost complete. Under the chairmanship of Ron Walker, the CEO of Australian Grand Prix Corporation, the new organization will seek to compensate by giving the promoters a united voice.

“FOPA will support Formula One,” Walker said. “The race promoters are not required to join, but can use the association to lodge their proxies to vote on major issues affecting the sport.”

The group's initial focus appears to be proposed rule changes by the FIA and, in particular, the projected introduction in 2014 of a new, 1.6-liter, single-turbo V6 engine formula with kinetic-energy-recovery and fuel-flow control. The promoters seem convinced that this could threaten their interests by damaging the appeal of Formula One race cars, thus reducing revenue from paying spectators.

“The circuits are concerned by the constant changing of rules, which is confusing the fans and affecting ticket sales,” he said. “It has now been mooted by the FIA that [in the future] they want to introduce a 'green' hybrid engine with a sound instrument attached. This [proposal] would be defeated by the circuits.”

Neil England, chairman of Silverstone Circuits in the U.K., commented, “We have historically lacked a coordinated voice, and the creation of FOPA gives us the opportunity to have that. As promoters, we believe that the noise made by the cars is a key part of the spectator experience, and we are concerned with anything that might impact that.”

For this reason, the organization can expect the initial support of Bernie Ecclestone. The Formula One CEO was so incensed by the 2010 proposal to go to small turbo engines that, even though the concept was approved by the engine manufacturers, he threatened to sue the FIA over the potential damage to his business. The governing body offered a compromise in June 2011 by going from four cylinders up to six, and increasing the rev-limit from 12,000 to 15,000rpm. But Ecclestone is still campaigning against the change. Walker said that FOPA's relationship with Ecclestone would go further.

“FOPA will support Bernie, period,” he said. “Any move by CVC [the controlling shareholder of Formula One] to replace Bernie will be vigorously defended by the circuits because they regard him as the glue that holds the sport together.”

It remains to be seen whether this statement will hold true in the future. The promoters whose races get no direct financial backing from national or regional governments are finding it increasingly challenging to cover the hosting fees demanded by Formula One. This season, only Austin, Texas; Barcelona; Hockenheim; Interlagos; Monza; Silverstone; and Suzuka fall into this category, all relying almost exclusively on ticket sales for race-weekend income. But others that do have some state backing are also coming under ever more pressure to turn losses into profits. If the Formula One Promoters Association stays together, it seems inevitable that there will be battles with Bernie.

Formula One Promoters Association's negotiating position does look strong, as England concluded.

“Promoters are such a key part of delivering the sport,” he said. “In fact, without promoters, there is no sport.”

Some of the current venues threatened recently to walk away from Grand Prix racing if they did not receive greater influence on its development. Were they to repeat this threat en bloc, the world's only remaining circuits with an FIA license to run F1 cars would be Dubai, Imola (Italy), Magny-Cours (France), Mugello (Italy), Paul Ricard (France) and the Red Bull Ring (Austria).